Climate change summit: Emmanuel Macron will want to make his voice heard

Press release
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12/6/2017

By Jean-Philippe Desmartin, Head of Responsible Investment at Edmond de Rothschild Asset Management

The COP23 has set the tone. At the December 12 climate change summit in Paris, Emmanuel Macon will want to make his voice heard even if Europe is currently showing no clear leadership. Last month in Bonn, the French President said the situation was so urgent that dealing with it would mean facing up to serious financial challenges. One particularly alarming sign is that carbon emissions have started to rise again after a 3-year lull. And a UN Environment report released on October 31 openly queried the target of limiting global warning to +2% by 2100.

At the COP23, Emmanuel Macron hammered home the point that all countries would have to make huge efforts to stick to the commitments made at the COP21 in 2015. That event had the key support of Washington and Beijing but the US decision to withdraw from the agreement means that Europe now has a key role to play. Will “Old Europe” succeed in assuming co-leadership with China? Emmanuel Macron has already called for Donald Trump’s decision to cease IPCC funding to be symbolically compensated. For the moment, the current political standstill in Germany precludes any pro-active stance from Berlin and thus from Europe.

In the meantime, one of the tough questions that participants at the December 12 summit will have to grapple with is how to raise the $100bn a year that developed countries promised back in 2015 to pay to the least developed countries from 2020 to help them fund energy transition. The US was at the time supposed to be one of the biggest contributors. How will this shortfall be met, at least until the end of Donald Trump’s term of office? The immediate focus will be on reassuring beneficiary countries as they are expecting a sustainable solution to be found.

At the same time, the French President could, in a gesture to business interests, put the question of a carbon price floor back on the agenda. A number of countries, investors and economists are in favour of a carbon price signal at €30 or $30 at least.

And looking beyond government action, he will probably encourage all stakeholders to acknowledge their responsibilities. Quite a few US states, cities and companies have already said they are willing to continue the fight against global warming even if the White House has backed out. Emmanuel Macron is also expected to encourage investors, most of whom are already fully aware of climate issues, to go further. And NGOs will be doing their job if they continue to apply pressure so that things really do change from 2020 onwards.